LOUISVILLE, Ky. (WDRB) – The law firm that represented the University of Louisville Foundation for nearly 20 years says it’s too late for U of L and the university foundation to sue over the firm’s alleged aiding and abetting of financial fraud under the administration of former U of L President James Ramsey.
Attorneys for Louisville law firm Stites & Harbison sparred with lawyers for U of L and the U of L Foundation in court Tuesday over the timeliness of a lawsuit filed April 25, 2018.
In the suit, U of L and the foundation allege Ramsey and his former aides depleted the university’s endowment with excessive spending and phony accounting, and that Stites enabled the improper conduct. Ramsey resigned as the president of the university and its foundation in 2016.
The university and foundation should have filed the lawsuit sooner, as news outlets including WDRB and Insider Louisville reported on multi-million-dollar compensation packages for university administrators through the foundation beginning in the spring of 2015, said Edward Stopher, a lawyer for Stites & Harbison, in court on Tuesday.
Andy Campbell, the attorney representing the U of L side, said the one-year window to sue Stites & Harbison didn’t start until the foundation officially sustained a loss from the improper conduct.
That didn’t happen until June 30, 2017, when the foundation wrote down the value of U of L’s endowment by $38 million to account for spending that Ramsey’s administration had improperly labeled an investment, Campbell said.
Stites was the “author and architect of these fraudulent schemes,” Campbell said in court.
Stites has asked Jefferson Circuit Judge Judith McDonald-Burkman to dismiss the allegations against the firm.
McDonald-Burkman has already ruled against Ramsey in his attempt to have the foundation pay his legal costs in advance and in his request to dismiss the allegations against him.
Early next year the case moves to the discovery phase, in which depositions will be given and documents exchanged, Campbell said in an interview following the hearing.
He estimated the foundation’s total losses from the alleged fraudulent conduct at $70 million to $90 million, though the lawsuit itself does not attempt to tally the damages.
Campbell said there are no active settlement talks.